Paragon Pharmacies Limited
TSX VENTURE : PGN

Paragon Pharmacies Limited

November 14, 2008 03:03 ET

Paragon Closes Equity Conversion and Private Placement and Appoints Senior Management Team

KELOWNA, BRITISH COLUMBIA--(Marketwire - Nov. 14, 2008) - Paragon Pharmacies Limited ("Paragon") (TSX VENTURE:PGN) today announced that it has closed the previously announced equity conversion and private placement transaction with Canterbury Park Capital L.P. and Canterbury Park Capital (US) L.P. (collectively "Canterbury").

As a result, the debenture obligation to Canterbury, including accrued interest, has been eliminated and approximately $13.5 million of cash previously in escrow has been released to Paragon. Harold Milavsky, Chairman of the Board, noted that "the availability of this cash combined with amendments to the existing bank lending agreements significantly strengthens the financial position of the Company and its ability to execute its business plan".

Canterbury was issued a total of 58,199,338 common shares of Paragon at an average price of approximately $0.40 per common share, resulting in an increase in ownership in Paragon from 25.6% (undiluted) outstanding common shares to approximately 70% (undiluted).

Paragon also announced that Lorraine McGrath has accepted the position of President of the Company. Ms. McGrath has been a director of the Company since March 2008. Ms. McGrath, who most recently was Executive Vice President and COO for Equity Development Bank of Canada and prior to that Vice-President with Prospera Credit Union, will be joined by Ron Lane, as President of Store Operations. Mr. Lane was previously responsible for pharmacy and health and beauty care operations for a large Western based retailer and brings with him many years of pharmacy and retail experience.

With the expiration of Randy Henderson's engagement as Interim CFO at the end of this month, Denis Taillieu will succeed him as Interim CFO. Mr. Taillieu is a director of the Company and serves as CFO of Canterbury Park Inc.

To reduce the size of the Board to seven members, both Ms. McGrath and Eugene Siklos have stepped down from the Board.

About Paragon

Paragon is headquartered in Kelowna, British Columbia and currently employs over 500 full and part time staff in its stores and offices. The Corporation owns and operates 18.5 retail pharmacies, 3 central fill locations and 2 home healthcare operations in British Columbia, Alberta and Manitoba.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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